The largest cost for insurers is claims and they will continue to rise, especially in light of developments such as the Law Commission's proposals covering pain and suffering, and the Ogden Tables. Indeed, bodily injury awards are rising at a rate of more than 12% a year and 36% of the premium income in the motor sector is consumed by personal injury claims. It is no wonder that a recent study predicted that motor insurance premiums would increase by around 25% over the next year.

One way of wiping millions off the claims settlement bill would be to adopt a new approach to rehabilitation. When comparing the UK's record in this area to those of other industrialised countries, it is obvious that changes must be made. For example, someone who has an accident and is left a tetraplegic has a 14% chance of returning to work in the UK. This compares to 32% in the US and 50% in Scandinavia.

However, more important than the fact that insurers are paying out millions of pounds a year as a result of the poor handling of rehabilitation practices, is the frustration the injured parties have to endure by the delays. One hospital doctor said that he wasted around 30% of his budget treating people with personal injuries when they should be in the community learning to live a normal life again.

There are a number of reasons why this situation prevails in the UK. The first is that despite the welcome introduction of the Woolf Reforms, there is a feeling among some injured parties and their advisers to do everything possible to ensure they receive the maximum settlement possible. Sadly, this can lead to rehabilitation being delayed. In the pursuit for the largest possible claim, treatment can be delayed as claimants place greater focus on demonstrating the severity of their injury. The claimant can lose sight of the fact that the sooner rehabilitation begins, the quicker their recovery will be. This will also ensure that any long-term effects from the accident will be kept to a minimum.

Drive for improvement

One key area where improvement is needed is the role that employers play. Around one-third of company vehicles, for example, are involved in a collision each year and their drivers have 50% more accidents than others. How fleet managers help their drivers with their claims is central to achieving a more efficient and claimant-friendly service. They must ensure that in the event of an accident, they immediately inform their insurance company and allow it to help in the claims process, which includes ensuring that the injured parties receive the right form of medical treatment immediately. Often, there is too much onus on the driver to submit his claim and this can draw out the whole process.

Indeed, millions of pounds a year are wasted through ineffective fleet risk management programmes. There must be greater focus on educating fleet managers about a “crash-free culture” and helping them understand the specific issues they face, as well as developing a tailored programme to meet individual needs.

In the workplace, there is also a greater need for speed in reporting accidents and helping injured parties recover. However, some employers are fearful of proactively helping their injured members of staff because of the perception that this could increase the chances of legal action.

In taking a more proactive role in managing an employee's rehabilitation, the cost of absence due to sickness can be reduced by ensuring they return to work as quickly as possible and in doing so, settlement costs are also kept down. This approach can also help improve staff morale, which can have a positive effect on absence and productivity levels.

These “hidden” costs can be larger than those for rehabilitating sick members of staff or settling their claims.

In the US, where there is a more proactive approach from companies in helping rehabilitate injured employees, there is roughly three times the chance of them returning to work than in the UK.

Insurers have a great deal of work to do in order to improve their claims process and records for rehabilitation. They need to ensure that they have access to a team of qualified occupational health advisers with medical and industry-based knowledge. This enables them to deal with the injured person's medical needs while helping them return to work as quickly as possible.

Getting your priorities right

Insurance companies also need to review their processes regarding rehabilitation and ensure that they are as efficient as possible. This should be based on ensuring adequate access to the necessary data for all those dealing with a claim.

A great deal of work is needed to ensure that rehabilitation is given the priority it deserves. Employers, insurers, brokers, and lawyers all need to review the way in which they manage claims and ensure that their systems are truly focused on the needs of the injured parties. Receiving a settlement is important, but making as full a recovery as possible has to take priority.

  • Roger Thrift is underwriting and marketing director of Zurich's commercial business unit.

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